Many prostate cancers relapse due to the generation of chemoresistance rendering first-line treatment drugs like paclitaxel (PTX) ineffective. The present study aims to determine the role of miRNAs and Hedgehog (Hh) pathway in chemoresistant prostate cancer and to evaluate the combination therapy using Hh inhibitor cyclopamine (CYA). Studies were conducted on PTX resistant DU145-TXR and PC3-TXR cell lines and clinical prostate tissues. Drug sensitivity and apoptosis assays showed significantly improved cytotoxicity with combination of PTX and CYA. To distinguish the presence of cancer stem cell like side populations (SP), Hoechst 33342 flow cytometry method was used. PTX resistant DU145 and PC3 cells, as well as human prostate cancer tissue possess a distinct SP fraction. Nearly 75% of the SP cells are in the G0/G1 phase compared to 62% for non-SP cells and have higher expression of stem cell markers as well. SP cell fraction was increased following PTX monotherapy and treatment with CYA or CYA plus PTX effectively reduced their numbers suggesting the effectiveness of combination therapy. SP fraction cells were allowed to differentiate and reanalyzed by Hoechst staining and gene expression analysis. Post differentiation, SP cells constitute 15.8% of total viable cells which decreases to 0.6% on treatment with CYA. The expression levels of P-gp efflux protein were also significantly decreased on treatment with PTX and CYA combination. MicroRNA profiling of DU145-TXR and PC3-TXR cells and prostate cancer tissue from the patients showed decreased expression of tumor suppressor miRNAs such as miR34a and miR200c. Treatment with PTX and CYA combination restored the expression of miR200c and 34a, confirming their role in modulating chemoresistance. We have shown that supplementing mitotic stabilizer drugs such as PTX with Hh-inhibitor CYA can reverse PTX chemoresistance and eliminate SP fraction in androgen independent, metastatic prostate cancer cell lines.